Apple still dominant in online movie sales, Walmart sneaking up

The online movie business has been booming in recent years thanks to everyone and their mom either starting up their own services or signing contracts with the major players. Despite so many entrants into the market, Apple has still managed to retain its dominance when it comes to delivering feature-length films to customers, though it has lost some of its share of the consumer dollar over time.

Apple got 64.5 percent of total consumer spending on online movies in 2010, according to a new report conducted on behalf of iSuppli by IHS Screen Digest, down from 74.4 percent in 2009. Microsoft came in second with 17.9 percent in 2010 (up from 11.6 percent in 2009), and Sony came in third with 7.2 percent of consumer spending (up from 5.7 percent). The “Others” category also went up between 2009 and 2010, from 8.3 percent to 10.4 percent. Because the entire market grew, though, Apple still pulled in more dollars than it did in 2009, despite the percentage drop. “The iTunes online store showed remarkable competitive resilience last year in the US EST/iVOD movie business, staving off a growing field of tough challengers while keeping pace with a dramatic expansion for the overall market,” IHS research director Arash Amel said in a statement. “iTunes managed to grow because of the introductions of the iPad and the second-generation Apple TV, which have spurred the company’s movie rental offerings and have invigorated the iTunes multi-screen ecosystem.”

IHS did note that Microsoft and Sony have presented Apple with some major competition over the last year. The Zune and PlayStation Store are strong competitors, and it shows in Apple’s marketshare. However, the player seen as giving Apple the biggest challenge yet is one that’s not even on the top three list, yet: Walmart. Following Walmart’s purchase of online movie service Vudu, IHS saw a spike in consumption in the fourth quarter of 2010.

“The future of the online movie business may come down to a competitive battle between Apple and Wal-Mart,” Amel said. “Although Wal-Mart is not on the charts yet, the company soon will become a major player if its current momentum continues.”